Lake Bluff Takes Closer Look at Electricity Aggregation

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The saying, "there’s power in numbers,” will begin to have a double meaning to Lake Bluff residents as the village considers a resolution to establish an electricity aggregation program as early as December.

A referendum could appear on the primary ballot on March 20, 2012.

According to village officials, the aggregation program is based on the same premise that governs economies of scale principles and sources: bulk purchasing of materials, in this case electricity, through long-term contracts.

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The volume of the overall purchase, in turn, reduces the cost per electrical load and those savings, as high as 15 percent to 20 percent, could be passed on to Lake Bluff residents.

Electricity aggregation programs have become more commonplace since 1997, when the Illinois General Assembly voted to deregulate electricity, opening the marketplace to more than just Commonwealth Edison.

In the spring, 20 communities passed electricity aggregation referendums on their ballots. Lake Bluff officials were watching.

“We’ve been following the Grayslake electricity aggregation program very closely," said Village Administrator Drew Irvin, "and it became quite clear that thoughtful consideration of this measure was in order. The number of communities adopting this program is building steadily, but electricity aggregation programs are still a relatively new concept.”

The goal of each program adoption: lower electricity bills.

To educate Lake Bluff residents on the advantages of the program, the village will hold informational meetings in the coming months.  Some may be partnered with Lake Forest, some possibly with other communities.

Irvin said the program likely would operate under an “opt-out” basis. That means Lake Bluff residents may continue to select their electrical supplier of choice. In either case, Commonwealth Edison still would deliver the power.

“The primary objective of the aggregation program is to allow the village to negotiate on behalf of its residents potentially discounted electricity rates," Irvin said. "There are roughly 21 different energy suppliers sanctioned by the ICC (Illinois Commerce Commission) that residents may still continue to shop as they do now by law, regardless of the passage of the referendum."

Village officials note there are risks, such as the possibility of being locked into a rate on a multiyear basis. Or the time and energy expended going through the bidding process and not securing a lower rate. This is highly unlikely based on the short-term knowledge of the program’s performance acquired thus far, but it is a possible outcome communities watch.

“We have positioned ourselves to examine this program at an opportune time," Irvin said.